Mid Atlantic Real Estate Journal — Shopping Centers — August 30 - September 12, 2013 — 13C
www.marejournal.com
S hopping C enterS
graduate of Cornell University, andAlbany Law School, Mr. Nel- By Jerry Nelson, Stark & Stark Issues for comm’l. landlords asking for guarantees A If Material Terms Do Not Change, Modification/ Amendment May Not Effect Liability
guarantors did not increase the overall liability as this was contemplated by the lease. But what about change in the size of the store? Change in the nature of the store, say from a pick-up location to a full service store? Or, changing the insurance limits? A Obtain Outside Counsel to Discuss your Commercial Lease/Guarantee Issues These are just a few reasons that commercial landlords should carefully consider guar- antee issues. Evaluating these issues requires careful review on an individual lease basis. continued on page 21C
Booth #240
son advised and r ep r e - sented Levin Management Corporation for over 21 years as in- house counsel and general counsel. com-
Some courts in New Jersey and other states have refused to enforce guarantees in certain situations, where the material terms of the lease are changed. However, so long as the overall liability does not change, New Jersey Courts are apt to enforce the guarantee. See Center 48 Ltd. Partnership v. May Dept. Stores Co., 355 N.J. Super. 390 (App. Div. 2002). In Center 48, the Court held a modifica- tion, which increased the rent and increased the liability of
Jerry Nelson
mercial lease is always more valuable with a guarantee. Having multiple parties to collect against minimizes risk and provides a level of protec- tion for a commercial landlord. However, issues can arise on enforcement when a commer- cial landlord amends or modi- fies a lease. For instance should a com- mercial landlord have each guarantor sign off on the modi- fication or amendment, even if they are not required to do so? Should a commercial landlord send notice to each of the guar- antors, even if the lease does not require you to do so? What if the original lease obligation is set to end? If a modification or amendment will lengthen the term, will it be enforceable against the guarantor? What if the guarantor thought they were getting out of the obliga- tion, but for the amendment or modification? Although the answers to these questions will depend generally on state law, these and other guarantee issues are all important questions that should be addressed prior to the amendment and modification with thoughtful and business- oriented counsel. Following is a brief discussion on how New Jersey Courts deal with the same. Guarantees Enforced That New Jersey Courts for years have generally enforced guar- antees, so long as they were properly prepared. See, United States Rubber Company v. Champs Tires, Inc., 73 N.J. Super. 364 (App Div. 1962). In United States Rubber Com- pany, a guaranty was enforced after the Court concluded that, it was “an absolute guaranty”, that was “absolute, uncondi- tional and continuing”, and “the clarity of the language of the guaranty was unmistakable”. However, a common question is what if the tenant says the language was not clear? Are Clear and Unambiguous
&5($7 ,9, 7< ō 48$/ , 7< ō (;3(57 , 6(
New York New Jersey Connecticut Massachusetts Pennsylvania Ohio Maryland
www.blcompanies.com
An Employee-Owned Company
Made with FlippingBook - Online catalogs